Correction

Most Doomsday experts have predicted 13 of the last three recessions. Loud prognostications about sharp downturns and market implosions are just part of the investing world.

Eventually, they'll be right. The sun will swallow the earth. But market corrections are much more statistically possible. A correction is defined by a 10% decline from a recent high on an exchange, commodity, individual equity, or other asset. Minor corrections range between 5% and 10%, while bear markets represent declines of 20% or more.

Given that value is defined by the market, it's possible that investors may push the price of an asset higher, beyond fair or even rational value. If bad news comes or one seller triggers an exodus from the position or market, then corrections of 5%, 10% or more are possible.

From 1985 to 2018, the S&P 500 experienced 25 "corrections," according to Yardeni Research, which sets the figure at a 5% decline or more. That research suggests that such a correction occurs around every 16 months.

So, use that to your advantage. When the correction comes, buy on the dip.